There was a time when the "VHS" was the only way to view videos that were previously recorded. Then came DVD's. But in 2005, something amazing happened. The phenomenon of "YouTube" came about. Three employees from "PayPal" all decided that there needed to be a way to share videos in a hassle-free way. So, the three pals launched the website youtube.com on February 15, 2005.

First YouTube video ever:


In order to gain an interest in "YouTube," the three decided to create a contest, in which they gave out one iPod Nano to a random member each day. This created a buzz in the teenage, college, and film-maker crowds. Many people enjoyed viewing free videos from all across the globe.

"YouTube" is a growing franchise, that was purchased by "Google" on October 9, 2006. "Google" purchased "YouTube" for 1.65 billion dollars in stock. "YouTube" was the largest purchase for "Google" at that time.

Sources: http://www.rev2.org/2006/10/02/youtube-the-complete-profile/
http://www.youtube.com/watch?v=x2NQiVcdZRY